BROKERS

Meaning of Broker,Type. Role of Brokers in Stock Exchg. SEBI Rules and Regulations. SEBI Registration. General Rule of Brokers.

A stock broker sells or buys stock on behalf of its clients A transaction on a stock exchange must be made between two members of the exchange A typical person may not simply walk into the Bombay Stock Exchange, and ask to trade stock. Such a transaction must be done through a broker

A Sub-broker acts on behalf of a stockbroker as an agent or otherwise for assisting investors in buying, selling or dealing in securities through such brokers but he is not a member of stock exchange Every sub broker is an important element in the customer value chain.

Bank A/c

DEMA T

BUYER

BROKER
STOCK EXCHANG E

SELLER

BROKER

Cash Bank A/c DEMA T Shares

Role of broker & sub broker in CAPITAL MARKET A broker is a member of a recognized stock exchange, who is permitted to do trades on the screen-based trading system of different stock exchanges. He is enrolled as a member with the concerned exchange and is registered with SEBI . A sub broker is a person who is registered with SEBI as such and is affiliated to a member of a recognized stock exchange

SEBI, established in 1988 and became a fully autonomous body by the year 1992 with defined responsibilities to cover both development & regulation of the market. SEBI Act,1992 was enacted to establish SEBI with statutory power for: a) protecting the interests of investors in securities. b) promoting the development of the securities market. c) Regulating the securities markets d) Registering and regulating the working of stock brokers and sub-brokers.

Stock Brokers Sub- brokers Foreign Brokers

Corporations, Companies or Institutions or subsidiaries of such

Criteria CAPI AGE STATUS Individuals Minimum age:21 years Maximum age:60 years Indian Citizen Corporate Minimum age:21 years (applicable for directors) Corporate Registered Under The Companies Act, 1956

EXPERIENCE

Should have a minimum of 2 years experience in a activity related to dealing in securities or as portfolio manager. NA Rs.30 Lakh.

MINIMUM PAID UP
EQUITY CAPITAL

Equity share trading is regulated through a exchange. The exchange takes care of smooth trading and timely settlement of outstanding dues. All these done through proper network. The exchange have a network of Brokers ,Sub-brokers and a clearing corporation. The brokers and sub brokers under takes the timely delivery and settlement of funds and share. The clearing corporation undertakes the transaction of brokers on behalf of the exchange.
Stock exchange ------ Brokers----------- buyer/seller
securities)

(clear and settle) - (Execute orders)- (Purchase& sale of

Know your Client Unique Client Code Margins from the Clients Execution of Orders Contract Note Payments/Delivery of Securities to the Clients Brokerage Segregation of Bank Accounts Segregation of Demat (Beneficiary) Accounts

Revenue for a broker is charges and commission, known as brokerage for executing buy/sell order submitted by the clients

Eg: If 1000 shares of Reliance @ 1200 are bought by a client and the brokerage charges are 0.50 %, then the brokerage income from this transaction is (1000 x 1200 x0.50%) Rs 6000/-

In the developed markets at least one broking firm is among the top 10 in terms of market capitalization If the market are bullish the broking firms tend to make super normal profits You are aware that bonuses at times exceed the whole years CTC in broking firms This is where a great opportunity lies to make a rewarding and profitable career, if you are able to properly get a hang of direct equities business

Fortunes of a broking firm are cyclical in nature If the market are bearish for a vary long time profits are substantially squeezed

Two facets Front office and back office Front office: Functions of the front office include acquisition, Relation ship management, Advise and entry of orders. Back office: Clearance processing, ensures payment and shares delivery

ADVICE

Recommend Investment and Trading ideas to their clients. The Clients receive the research and the business receives the revenue

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Research Ideas

Strategy Desk Idea Filtering

Advisors Ideas according to Profile

Clients

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